According to Asda Income Tracker, it has become more expensive to eat out and stay in hotels, owing to the slowing down of the growth in shoppers’ spending power for the fourth consecutive month in January when inflation was at its highest level since January 2015. The study says that despite the fall in prices of food clothing and fuel, the spending power has slowed down.
Sam Elderson, an economist at CEBR, said the even as the spending power slowed down the overall picture in the retail sector is promising. The customers in UK, unlike in the past, have more money to spend. The study also revealed that the average weekly discretionary income was at £197, up £12 when compared to the figures an year back.
Asda chief executive Andy Clarke said: “Another double-digit increase in disposable income in January gave a welcome financial boost at a tough time of year. In juxtaposition, annual growth in spending power fell year-on-year for the fourth consecutive month. ”The good news for consumers is that the competitive retail environment is translating to lower prices across the board.”
The report also says that the year-on year figures suggests that the net income increased by 2.3 percent, thanks to the slowdown in average wage growth. The figures for the previous year were around 3 percent. Mortgage interest payments are also down 1.8 per cent compared to a year earlier as lenders battle to attract customers.Britain’s employment rate also hit a new record high of 74.1 per cent in the final months of last year, bringing a boost to household discretionary income.